Healthcare Fraud

September 28, 2016

Pennsylvania-based hospital chain Vibra Healthcare LLC agreed to $32.7 million to resolve claims it violated the False Claims Act by billing Medicare for medically unnecessary services.  According to the government, Vibra admitted numerous patients to five of its long term care hospitals and one of its inpatient rehab facilities who did not demonstrate signs or symptoms that would qualify them for admission.  In addition, Vibra allegedly extended the stays of its long term care patients without regard to medical necessity, qualification and/or quality of care.  In some instances, Vibra allegedly ignored the recommendations of its own clinicians, who deemed these patients ready for discharge.  The allegations originated in a whistleblower lawsuit filed by Sylvia Daniel, a former health information coder at Vibra Hospital of Southeastern Michigan, under the qui tam provisions of the False Claims Act.  She will receive a whistleblower award of at least $4 million from the proceeds of the government's recovery.  Whistleblower Insider

October 17, 2016

New York has joined with other states and the federal government and reached agreement with institutional pharmacy Omnicare Inc. (Omnicare) to settle civil allegations that Omnicare conspired with Illinois-based pharmaceutical drug manufacturer Abbott Laboratories (Abbott) to increase overall utilization of the drug Depakote through the use of various disguised kickback arrangements. Omnicare, acquired by CVS Health Corporation effective August 18, 2015, provides pharmaceuticals and related pharmacy services to long-term care facilities as well as chronic care facilities and other settings. Depakote is approved for treatment of seizure disorders, mania associated with bipolar disorder and prophylaxis of migraines. Omnicare will pay the states and the federal government a total of $28.125 million in civil damages to compensate Medicaid, Medicare, and various other federal healthcare programs for harm suffered as a result of its conduct. NY

Bay Sleep Clinic - Healthcare Fraud/Kickbacks ($2.6 million)

Constantine Cannon represented a whistleblower under the False Claims Act case alleging Bay Sleep Clinic billed Medicare for sleep studies by unlicensed technicians and paid kickbacks to doctors for patient referrals.  In December 2016, the company agreed to pay $2.6 million to settle the matter.  Our client received a whistleblower award of roughly 21% of the government’s recovery.  Read more -- SF Gate, DOJ, PR Newswire, CC.

October 5, 2016

A transportation company, its owner, and three managers have been indicted in connection with an alleged scheme involving $19 million in false claims billed to the state’s Medicaid program (MassHealth), Attorney General Maura Healey announced. The company primarily provided MassHealth members with non-emergency transportation services to methadone clinics. The AG’s Office alleges that between April 2011 and September 2015, Westminster-based Rite Way LLC (Rite Way) fraudulently and repeatedly billed MassHealth for transportation services that were never provided, including claims for individuals who were hospitalized in inpatient settings, no longer used the company’s services, or were deceased on the claimed dates of service. MA

October 4, 2016

Pennsylvania announced the Office of Attorney General has reached a settlement with a chain of nursing homes accused of misleading consumers by failing to provide basic services to elderly and vulnerable residents. The settlement with Reliant Senior Care Holdings, Inc. and related companies requires a $2 million payment to the Office of Attorney General and a series of changes devised to make sure that staffing levels and care within facilities owned or operated by Reliant match the representations made in marketing materials, care plans and bills. The settlement was the result of an investigation conducted by the Office of Attorney General’s Health Care Section. PA

September 30, 2016

New York announced guilty pleas by Katia Donnelly and her durable medical equipment and supply store, Bennett Surgical Supply, Inc., for submitting thousands of false claims to Medicaid resulting in Medicaid paying them more than two million dollars over a six and a half year period. Donnelly admitted during her plea that she used the Medicaid identification numbers of Bennett Surgical customers to fraudulently bill for items she never purchased or delivered to them. She and her corporation plead guilty to Grand Larceny in the Second Degree, and it is expected that Donnelly will be sentenced to 2 to 6 years in State Prison. NY

September 26, 2016

New York announced that it has entered into a settlement agreement with First Call, Inc., to resolve allegations that it billed Medicaid for transportation services provided by unqualified drivers and without required documentation. The investigation settled False Claims Act allegations that are identified in the settlement agreement, pursuant to a qui tam lawsuit filed by whistleblower Thomas D. Ayers asserting claims under the New York False Claims Act. As a result of the settlement, the company will pay New York State $173,650.83 in restitution and damages pursuant to the New York False Claims Act. NY

September 22, 2016

A federal jury in Los Angeles convicted Michael Huynh, the owner of a California medical clinic, for his role in a health care fraud scheme and for filing false income tax returns. Evidence at trial showed that Huynh provided false prescriptions to a pharmacist and co-conspirator, Farhad N. Dany Sharim, who submitted false claims to insurance companies for drugs that were never dispensed.  DOJ

September 19, 2016

North American Health Care Inc., a California-based operator of dozens of skilled nursing facilities (along with its Chairman John Sorenson and Senior Vice President of Reimbursement Analysis Margaret Gelvezon) agreed to pay $30 million to resolve charges they violated the False Claims Act by billing for medically unnecessary rehabilitation therapy services.  Whistleblower Insider